Canada-EU summit: What do both sides want, and what’s at stake?

Canada is set to host a summit with the European Union to bolster bilateral strategic and economic ties as its relations with its southern neighbour, the United States, are in sharp decline.

The summit is scheduled for October 29 to 30 in Canada’s French-speaking city of Montreal, and is expected to focus on closer cooperation on trade, technology, defence, energy, critical minerals, artificial intelligence, research and financial services.

In September, European Commission President Ursula von der Leyen proposed opening the door for Canada to become the EU’s first “associate member”; Canadian Prime Minister Mark Carney welcomed the move.

What is the summit, and why is it happening now?

This will be the 21st Canada-EU summit and is expected to build on the Comprehensive Economic and Trade Agreement (CETA), which entered into force in 2017. It eliminates duties on up to 99 percent of all imported goods between the two sides, according to the European Council.

“In Montreal, we will take our partnership to the next level by launching our ‘Alliance for the Future’ to deepen our political, economic and institutional ties even further,” said European Council President Antonio Costa, who will be attending the summit along with Carney and von der Leyen. They are expected to issue a joint statement.

The deepening Canada-EU alignment seems fuelled by US President Donald Trump’s policies, which imposed hefty tariffs on both Canadian and European exports to the US and pushed Canada to look for ways to reduce its economic dependence on the US. Before Trump’s tariffs whipsawed relations, Canada sent nearly 80 percent of its exports to the US.

In August, trade talks between Ottawa and Washington, DC, broke down, and Trump imposed a 50 percent levy on $20bn of Canadian goods, or 5.5 percent of its exports. Canada responded with equivalent tariffs on US steel, dairy, appliances, farm equipment, pulp and paper, and electronics.

What do Canada and Europe want from each other?

Both sides are seeking opportunities that will open more options beyond the world’s largest economy.

“The opportunity is clear. The EU brings market power, research depth, and manufacturing strength. Canada brings abundant energy, critical minerals, world-class capabilities in space, artificial intelligence (AI), and quantum, and one of the world’s strongest banking systems,” Carney’s office said in a statement.

The summit will give the two sides a chance to turn these “complementary strengths into concrete benefits for our peoples,” the statement added.

Vina Nadjibulla, co-founder and CEO of the Centre for Strategic Statecraft, a think tank in Ottawa, Canada, sees benefits and challenges.

“These fields could be beneficial for both sides, and we are likely to see specific announcements during the summit on these sectors,” she told Al Jazeera.

“The main challenge is how quickly the political momentum can turn into specific deals and projects to deliver specific economic results,” she added.

The EU describes Canada as “the only non-European country” taking part in Security Action for Europe (SAFE), the EU’s 150 billion-euro ($167bn) loan programme that supports and expedites defence procurement by EU member states.

The EU concluded its agreement with Canada, allowing it to participate under SAFE, in February, and it gives Canadian firms preferential access and treatment in defence procurements financed by the SAFE Instrument.

Could Canada become an associate member of the EU?

Last month, von der Leyen proposed that Canada could become the EU’s first associate member, suggesting a deeper relationship spanning trade, technology, defence and economic security.

Carney later welcomed the proposal’s ambition, describing his goal as a “unique alliance” rather than conventional EU membership.

However, the term “associate member” does not currently exist in EU treaties or its standard enlargement framework, according to the Centre for European Policy Studies (CEPS), a Brussels-based think tank.

“The term does not actually matter; what is important is the practical deepening of the relationship and the actual results, no matter what the final term is,” Nadjibulla said.

Is it an anti-American alliance?

“This is a partnership not against anyone else, but for our common strength,” von der Leyen said in her address to the European Parliament in Strasbourg last month, which Carney attended, making him the first foreign head of government to attend the annual “State of the European Union” address.

Nadjibulla agrees.

“I do not see that as an anti-US coalition. It is rather about diversification of economic and defence partnerships and building resilience for Canada. It is a continuation of Canadian Prime Minister Carney’s policies to create opportunities. A deeper alliance with Europe is essential to this agenda,” she said.

“President Trump will likely not appreciate this, but it is about Canada having more choices in an unpredictable world,” she added.

Bob Rae, former premier of Ontario and Canada’s ambassador to the United Nations from 2020 to 2025, told Al Jazeera that “President Trump does not control our policy. We have been having long and productive relations with the Europeans for hundreds of years, but Trump chose to treat Canada in a way that does not respect our sovereignty”.

He added that “engaging in conversations with the EU is perfectly normal and is not directed at the US”.

Trump has threatened the European Union with new tariffs over its proposal to make Canada the bloc’s first “associate member”, suggesting the move could be considered hostile to the US.

“If it’s a good intention, that’s fine. If it’s a bad intention, we’ll put very heavy tariffs on Europe,” Trump told reporters in Charlotte, North Carolina, in September.

Trump dismissed the prospect of Canada joining the EU as “laughable” and called the US’s northern neighbour a “terrible trade partner”.